Headlines

AP

Are you a tax cheat if you shop online tax-free?

In states with sales taxes, if you buy something from an out-of-state retailer and don’t pay taxes, you are supposed to pay those taxes when you file your state tax return, said Neal Osten, director the Washington office of the National Conference of State Legislatures.

Only Delaware, Montana, New Hampshire and Oregon have no sales tax. Alaska has no state sales tax but does have local ones.

Unpaid sales taxes are usually referred to as “use taxes” on state income tax returns. Use taxes apply to purchases made over Internet, from catalogs, television and radio ads and purchases made directly from out-of-state companies. State officials, however, complain that few people pay these taxes, Olsten said.

“I do know about three people that comply with that,” says Sen. Mike Enzi, R-Wyo., the main sponsor of the Senate bill.

Enzi’s bill would empower states to require businesses to collect taxes for products they sell on the Internet, in catalogs and through radio and TV ads. Under the bill, the sales taxes would be sent to the states where a shopper lives.

Always have declared my purchases on the use tax form. No reason to get into tax trouble over a few dollars in sales/use tax.

Here’s a wake up call for the bricks and mortar crowd who think this will make them more competitive–WRONG! I shop online because I don’t have to put up with rude customers and clerks, with sales ads that misrepresent the deal, and with merchants that can no longer afford to stock their inventory and I’ve made the drive to the mall for nothing. No, the sales tax collection at the point of sale will not make you guys more competitive.

In states with sales taxes, if you buy something from an out-of-state retailer and don’t pay taxes, you are supposed to pay those taxes when you file your state tax return, said Neal Osten

This guy is either flat out lying or he doesn’t know what he’s talking about. There is no law that requires that.

Axion on May 6, 2013 at 9:10 PM

oh, there sure is in my state. Just prepared and filed my own taxes (like usual) and I guarantee you that I’m supposed to declare anything I bought out of state… they even have a helpful guide of possible things I could have purchased (cigarettes, televisions, items online, items through the mail… etc)

Nope, you are wrong. Many states have it in their tax code. Anything you buy online you are supposed to account for and then pay a sales tax on those purchases.Few people bother to do this and even fewer people even know they are supposed to.

I can’t even get a large retailer like Staples to charge me the correct sales tax rate. This is a joke and will drive every smaller on-line retailer out of business. The government does not have a right to my money when they have invested nothing into the sale. My property taxes go up every year and I get crappier service and crumbling roads. KMA

Here’s a wake up call for the bricks and mortar crowd who think this will make them more competitive–WRONG!

Exactly right. I live in Seattle, so I pay full sales tax on Amazon purchases, and I still buy everything from them. They always have exactly what I want, and as an adult the list of things that I cannot stand to wait 48 hours to receive is pretty short.

This is a joke and will drive every smaller on-line retailer out of business.

Also exactly right. This bill is one giant sloppy wet kiss from DC to Amazon and eBay.

The Democratic-controlled Senate voted 69 to 27 to back the measure, which pits brick-and-mortar stores like Wal-Mart Stores Inc and cash-hungry state governments against such Web retailers as eBay Inc and Republicans wary of new tax measures.

I just don’t know what it would be like to live in a place that has a local sales tax or even a state sales tax. If there is no local tax where you live, are you really a tax cheat when you buy something from online even if the item comes from a heavy taxed state. Pure definition of taxation without representation and the Tea tax if you have to summit taxes to anywhere except your own state capital.

So if i sell someone some old junk on Ebay now, Ebay is going to be forced to take sales tax out of that, or charge it to the buyer (which basically means it’ll come out of my bottom line)? If so, craigslist here i come.

If there is no local tax where you live, are you really a tax cheat when you buy something from online even if the item comes from a heavy taxed state.

tjexcite on May 6, 2013 at 10:23 PM

That’s the inverse of what the use tax is, though. The use tax comes into play when you are in a state that does charge sales tax.

For example, I’m in California. If I bought some DVDs from Amazon (prior to them starting to collect sales tax late last year), then no sales tax would have been collected at the point of sale. The use tax requires me to calculate and pay the tax when I file my state tax returns.

Is your state acting criminally by violating the interstate commerce clause of the Constitution? Should Congressmen in Washington be punished for delegating their power to regulate interstate commerce when the Constitution explicitly vests it solely in them?

Funny how the government violates the law with impunity, but we’re the bad guys for not going along with them.

Shopping on-line saves energy, reduces pollution, increases the efficiency of the economy, yields more leisure time for consumers, and results in lower barrier to entering the free market leading to more participation in commerce and a stronger economy and more innovation. In a sane world it would be given subsidies instead of being punished. Unfortunately, our leaders are only marginally better than medicine men with painted bodies making decisions by smoking hallucinogens and reading entrails.

I do my own taxes and have never heard of this, I just learned that my state is now passing legislation to get their share of this revenue. Even if passed, I’m not going to keep track of the stuff I buy online and calculate it out. I pay enough in taxes so they can go pound sand

No more so then if you bought something out of state and had it shipped to your home.

Lots of shops will do that and there are some industries where they do it nearly every time.

A good example would New York art galleries. Want a 10,000 dollar painting? Want to pay NY sales tax on that? Of course not. So you get it shipped to your home in New Hampshire. Boom… you just avoided NY sales tax at a brick and mortar NY store on an item that could potentially be millions of dollars.

Anyone going to close that loophole? That’s what I thought.

The “these people are tax cheats!” twits are clueless. The tax code is very complicated and is gamed by everyone in different ways. People at the bottom basically don’t pay taxes or actually get money back from the government rather then paying out. This is by design but no one is going to claim they’re paying their fair share since they’re not paying anything. People at the top move their money legally AROUND many of the tax codes and if they do it properly they can end up paying a very low tax rate. I don’t blame them either since we don’t have a flat tax system and if they didn’t game the system they’d get robbed by it. And then you have the middle class that mostly does pay their taxes… except not the sales tax since the internet retail market exploded.

So its apparently only forbidden to evade taxes if you’re middle class. Good to know.

Disagree? Remember John Kerry’s boat? Anyone that can LEGALLY avoid taxes is going to do it. Its just practical. The solution is to cap these taxes at something low enough that we don’t need to find loop holes and then remove the loopholes. In that order.

My Mother in law lives in Maryland and my sister in law lives in Philly. Delaware has no sales tax and runs ads in those areas enticing people to come to Wilmington for the tax-free shopping. To me, there is no difference between that and looking for online deals where you don’t pay sales tax.

This guy is either flat out lying or he doesn’t know what he’s talking about. There is no law that requires that.

Axion on May 6, 2013 at 9:10 PM

Here in FL, we don’t have an income tax, but are required to pay a use tax if we didn’t pay sales tax. I don’t think many people know it exists or pay it:

Use tax is due on the use or consumption of taxable goods or services when sales tax was not paid at the time of purchase. For example:

If you buy a taxable item in Florida and didn’t pay sales tax, you owe use tax.
If you buy an item tax-exempt intending to resell it and then use the item in your business or for personal use, you owe use tax.

If you buy a taxable item outside Florida and bring or have it delivered into this state and you didn’t pay sales tax on the item, you owe use tax.